Asia stocks stumble as weak China trade data raise growth concerns

Asian stocks stumbled to three-week lows and U.S. stock futures and Treasury yields fell after China's September trade data showed a sharp decline in exports, raising fresh concerns about the health of the world's second biggest economy.

Risky assets have had a torrid start to the final quarter of 2016 after recent outperformance as concerns around the outcome of U.S. elections, fallout from a "hard Brexit" and a struggling German banking sector spread turmoil in markets.

Early on Thursday, the mood soured after data showed Chinese imports in dollar terms were back in contractionary territory in September while exports dropped by a sharper-than-expected 10 percent.

The weak trade data fuelled a broader-risk off move. Some analysts said the soft data also raised concerns that China may pursue a weaker currency policy in the coming months, stoking deflationary pressures for the rest of the region at a time when corporate earnings' growth has slowed.

"The continued underwhelming performance of Chinese exports adds weight to our view that the People’s Bank will maintain its recent policy of gradual trade-weighted renminbi depreciation in coming quarters," economists at Capital Economics wrote in a note.

Elsewhere, sterling treaded water after British Prime Minister Theresa May's offer to give UK lawmakers a say in plans to leave the European Union.

Within Asia, the Thai baht will be in focus after falling to an eight-month low in the previous session on concerns about the health of 88-year-old King Bhumibol Adulyadej. The health of the world's longest reigning monarch has "overall not yet stabilised", the palace said on Wednesday.

Oil prices struggled following a 1 percent drop overnight after the Organization of Petroleum Exporting Countries reported its output hit an eight-year high in September, offsetting optimism over the group's pledge to restrict output.

U.S. West Texas Intermediate crude slipped 1.1 percent to trade at $49.62 a barrel. Gold stabilised around the $1,250 per ounce level after falling sharply last week.